Definity Financial arranges $1-billion note financing

Executive Summary

• Definity Financial Corp. announced a $1 billion private placement of senior unsecured notes to finance a portion of its $3.3 billion acquisition of The Travelers Companies Inc.'s Canadian operations.
• The financing consists of two series of notes: $650 million due in 2030 and $350 million due in 2035, both carrying fixed interest rates of 3.709% and 4.393% respectively.
• The transaction includes specific redemption provisions, including a special mandatory redemption clause if the underlying acquisition does not close by the outside date.

Key Details

• Total Principal Amount: $1 billion aggregate principal amount of senior unsecured notes.
• Series 1 Notes:
  • Amount: $650 million.
  • Interest Rate: 3.709%.
  • Maturity Date: September 12, 2030.
  • Redemption: Callable at the option of Definity prior to August 12, 2030, at the greater of the Canada yield price or 100% of principal plus accrued interest. Callable at 100% of principal plus accrued interest on or after the par call date.
• Series 2 Notes:
  • Amount: $350 million.
  • Interest Rate: 4.393%.
  • Maturity Date: September 12, 2035.
  • Redemption: Callable at the option of Definity prior to June 12, 2035, at the greater of the Canada yield price or 100% of principal plus accrued interest. Callable at 100% of principal plus accrued interest on or after the par call date.
• Use of Proceeds: To finance a portion of the cash consideration of approximately $3.3 billion for the acquisition of the Canadian operations of The Travelers Companies Inc. (excluding select business lines retained by Travelers, such as the Canadian surety business).
• Mandatory Redemption Clause: If the acquisition transaction is not completed by the outside date or the purchase agreement is terminated without closing, the notes are subject to a special mandatory redemption at a price equal to 101% of the principal amount plus accrued and unpaid interest.
• Underwriters: Best efforts agency basis conducted by a syndicate co-led by RBC Capital Markets and TD Securities.
• Expected Closing Date: September 12, 2025.
• Company Context: Definity is a leading property and casualty insurer in Canada with $4.6 billion in gross written premiums (12 months ended June 30, 2025) and $3.8 billion in equity attributable to common shareholders (as at June 30, 2025).